DuPonthttps://www.delawareonline.com/newsjournal/business/2004/11/04dupontwhitepigm.html DuPont white pigment business thriving By RICHARD SINE / The News Journal 11/04/2004 Higher demand and more efficient manufacturing will boost DuPont's $2 billion white pigment business despite increasing competitive pressures, its business leaders said Tuesday. Sam Severance, general manager of DuPont's Titanium Technologies business, said DuPont has raised prices three times this year, a response to an 8 percent rise in demand. Inventories are low and production is at peak capacity, he said. "Demand has recovered strongly," Severance said in a conference call with analysts. DuPont's Edge Moor plant manufactures titanium dioxide for use in paper. The plant employs about 300 people and produces about 100,000 tons of the pigment a year, DuPont spokesman Rick Straitman said. DuPont's other titanium dioxide plants are in Michigan, Tennessee, Mexico and Taiwan. The company produced nearly a million tons of the pigment in 2003, a quarter of the world's total production. Its major competitors are Lyondell Chemical, Kerr McGee Corp., Huntsman International and Kronos Worldwide Inc. Severance predicted growth in line with DuPont's overall goals of 6 percent sales growth and 10 percent earnings growth, but declined to give more specific figures for his business. Analyst John Roberts, of investment firm Buckingham Research, said DuPont's expectation of higher demand for its pigments is realistic given that "in general, the economy continues to expand." Commodities such as white pigment typically produce low profit margins and compete on cost alone. DuPont shed its textiles unit, Invista, after nylon and other products it pioneered became commodities. But Roberts said DuPont's proprietary manufacturing process allows it to produce at a low cost and high profit. Severance said DuPont makes more than 60 percent of the industry's total profits. He added that improved efficiency has saved the business more than $200 million since 1999. Consolidation is increasing cost and pricing pressures in the industry, Severance said. In 1990, there were six major suppliers of the ore used in the pigment, he said. Today, there are two. In 1990, the top 10 pigment consumers in the paint industry controlled one-quarter of the global pigment market. Today, they control half. Severance said the pigment business plans to increase research spending by 35 percent by 2007. Contact Richard Sine at 324-2878 or rsine@delawareonline.com. TOP OF PAGE | PRINTER-FRIENDLY FOR